NextFin news, Singapore shipping company X-Press Feeders declared on Tuesday, September 23, 2025, that it will refuse to pay the US$1 billion in damages ordered by Sri Lanka's Supreme Court for the environmental pollution caused by the sinking of its vessel, MV X-Press Pearl, off Colombo Port in June 2021.
The MV X-Press Pearl caught fire, reportedly due to a nitric acid leak, and sank after nearly two weeks of burning. The ship was carrying 81 containers of hazardous materials, including acids and lead ingots, along with hundreds of tonnes of plastic pellets. The incident resulted in severe pollution along an 80-kilometre stretch of Sri Lanka's western coastline, leading to a fishing ban for months.
X-Press Feeders' Chief Executive Shmuel Yoskovitz told AFP that paying the court-ordered damages would have "wide-ranging implications on global shipping" and could "set a dangerous precedent." He emphasized that maritime trade relies on the limitation of liability, which the court's ruling undermines. Yoskovitz also expressed concern that the absence of liability limits could increase insurance premiums, ultimately affecting consumers.
The Sri Lankan Supreme Court's July ruling ordered the company to pay an "initial" US$1 billion within a year, with the first installment of US$250 million due by Tuesday, September 23, 2025. The court also mandated the company to make further payments as directed in the future. Yoskovitz criticized the open-ended nature of the penalty, describing it as a "hanging guillotine" that makes business operations impossible.
Since the disaster, X-Press Feeders has spent approximately US$170 million on wreck removal, seabed and beach cleanup, and compensation for affected fishermen. The company stated it is willing to pay more but insists on settling under established marine conventions with a full and final amount.
Sri Lanka's government said it will consult its chief prosecutor on possible actions following the refusal. Government spokesman and media minister Nalinda Jayatissa said, "We will be guided by the advice of the attorney general on what further steps to take." The United Nations office in Colombo supported the court's ruling, highlighting the "polluter pays" principle enshrined in global agreements, including the UN Convention on the Law of the Sea.
The Supreme Court has scheduled a hearing on Thursday, September 25, 2025, to discuss the implementation of its decision. The court's 361-page judgment also instructed police and the state prosecutor to initiate criminal proceedings for non-compliance if the parties are present in Sri Lanka.
Legal complexities remain, as X-Press Feeders obtained a limitation of liability order from London's Admiralty Court in July 2023, capping liability at 19 million pounds (approximately US$25 million), which Sri Lanka has challenged. Additionally, Sri Lanka filed a lawsuit against the ship's owners in the Singapore International Commercial Court, currently stayed pending the London case, with a pre-trial hearing expected in May 2026.
The incident's long-term environmental impact is still under study. Environmental advocates urge further research to assess the full extent of damage to Sri Lanka's marine ecosystems. Hemantha Withanage from the Centre for Environmental Justice noted that while visible plastic pollution has been cleaned, the effects will persist for years.
The ship's Russian captain, Vitaly Tyutkalo, has been banned from leaving Sri Lanka for over four years. X-Press Feeders reportedly offered to pay a fine for his release, which was refused.
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